Baby boomers are diamonds' best new friend

The diminishing ranks of diamond exploration hardliners in Australia were told Monday that America's baby boomers are now driving global demand for diamonds and the same thrust is expected to spread globally.

PERTH - 

One of the world's and South Africa's high profile diamond market observers, James Allan, told Paydirt's World Diamond Conference Monday that "if ever there was any doubt, diamonds are still a girl's best friend - particularly in the United States."

Allan, Principal of the AllanHochreiter finance group, said Americans born between 1945-1964 were now spending much of their disposable income buying diamonds, and that was showing in the US now representing 43% of the world's $US72 billion annual diamond retail sales market. "We have seen spikes in the number of Americans taking cruises and buying Harley Davidsons - but diamonds are right up there, and that is driving world demand.

"And I see no reason why that trend won't extend to the rest of the world," he added.

"This is already evident in the lucrative petro-dollar economies of Asia and the Middle East where retail sales of diamonds are being rapidly driven higher with this region currently representing about 15% of global retail sales market."

He said international diamond exploration was on the increase, with Africa leading the way with $US400 million spent in 2006, compared to $US22 M in Australia.(However, Australia's diamond quest is on the wane with the departure of De Beers after several decades in Australia, some companies opting for other commodities and Bonaparte Diamonds pulling out of its Australian marine quest to focus on Namibian and Namaqualand waters in South Africa, and many other Australian companies placing a greater focus on Africa. This was also reflected by the fact that few presenters at the conference this year were talking about Australian diamond exploration projects, a factor also to be reflected by tomorrow's presentations).

A contrast is Canada's Stornoway Diamond Corporation which sees explorers around the world taking advantage of what its senior geologist John Armstrong described as a "perfect storm" - enjoying the ridge between strong demand and diminishing global supply.

Armstrong said those companies with the ability to market their own products - a capacity that has developed in Canada - are among those best placed to prosper. He said China and India were showing strong growth in the demand for diamonds - with that trend expected to increase further in the coming years.

An undaunted Australian diamond seeker, Dr Kevin Willis of Flinders Diamonds Ltd, believes new exploration technology and skills will assist Australian companies to edge closer to their "Holy Grail" - the country's next major diamond discovery. This technology, he said, was helping Flinders Diamonds in its quest in the Gawler Craton of South Australia, and its new joint venture on Flinders Island off Eyre Peninsula with Tawana Resources and a private company.

Wolf Marx, Managing Director of Tawana, which now has a greater focus on southern Africa, said this is a good time to be in the industry, with many exploration companies moving from Canada and Australia back to the roots of diamond discoveries in Africa, mainly southern Africa."The ‘rush' is being experienced in DRC Angola with the majors and a lot of juniors, but also in South Africa and Botswana, which are really becoming a very strong focus particularly from investors in Europe and the United Kingdom," Marx said.

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